This content was published on October 3, 2018 3:29 PMOct 3, 2018 - 15:29

FILE PHOTO: South Africa's Finance Minister Nhlanhla Nene looks on ahead of the Judicial Commission of Inquiry probing state capture in Johannesburg, South Africa October 3, 2018. REUTERS/Siphiwe Sibeko

(reuters_tickers)

By Mfuneko Toyana

JOHANNESBURG (Reuters) - South Africa's Finance Minister Nhlanhla Nene told a judicial corruption inquiry on Wednesday that he was fired by former president Jacob Zuma for refusing to approve a $100 billion nuclear power deal with Russia in 2015.

Nene is the highest profile figure to give evidence at a probe into alleged influence-peddling by the Gupta family, friends of Zuma, who are accused of using their relationship with the former leader to unduly win state contracts.

Zuma has repeatedly denied accusations by his opponents that he pushed for a deal with President Vladimir Putin at a BRICS summit for Russia to build a fleet of nuclear power stations.

Opposition politicians and local investigative journalists say the proposed deal - which would have been the biggest state contract in South Africa's history - would have included huge kickbacks for Zuma and the Gupta family.

The Indian-born brothers - Ajay, Atul and Rajesh - have been accused of using their ties with Zuma to siphon off billions of rand in state funds and of inappropriately influencing cabinet appointments.

They left South Africa earlier this year around the time Zuma resigned under pressure from his own party and the authorities are seeking their return to face prosecution.

Nene, in the first public account of the nuclear negotiations, said Zuma became hostile towards him at a meeting at the summit when he refused to sign a guarantee letter Zuma wanted to present to Putin while in Russia.

“It was a very tense meeting that ended with us just being instructed by the president to go and find a solution, which we didn’t find," Nene told the inquiry.

“I told the president in the meeting that I could not sign the letter without having first interrogated the financial and fiscal implications”

A spokesman for Zuma did not immediately respond to a request for comment. The Kremlin did not immediately respond to a request for comment.

Allegations of corruption have been swirling around Zuma and the Gupta brothers for years, but the current inquiry is for the first time allowing senior government officials to give their accounts to the public.

"SMOKING GUN"

"Nene's testimony is extraordinarily important. This is the person who was CEO when it comes to the public purse," political analyst Ralph Mathekga said.

"Before this evidence it was difficult to connect the dots to Zuma. But this is a smoking gun which shows Zuma was a protagonist in this affair."

Zuma fired Nene in December 2015 and replaced him with largely unknown lawmaker Des van Rooyen, sending markets into a tailspin before Zuma appointed investor-friendly Pravin Gordhan as his third finance minister in the space of four days.

Zuma's successor as president Cyril Ramaphosa re-appointed Nene finance minister in February this year.

Nene told the inquiry he lost his job for not approving contracts that would benefit the Gupta family, particularly the Russian nuclear deal. His decision to reject a proposed national airline route to Sudan on grounds that it was not commercially viable also contributed to his sacking.

"I do believe I was removed as minister of finance for my refusal to toe the line in relation to certain projects," he said.

Nene's supporters have portrayed him as a principled official who sought to defend the country's strained public finances against corrupt attacks from Zuma and his allies.

However, his detractors, including the radical opposition Economic Freedom Fighters, say he was involved in corrupt deals with the Guptas when he was deputy finance minister and head of the state pension fund from 2008-2014.

Nene told the inquiry he met the Gupta brothers several times, including four visits to their family home in Johannesburg between 2010-2013, but said it was normal practise to meet business leaders as a deputy finance minister.